Dakota Company experienced the following events during Year 2: Acquired $30,000 cash from the issue of common stock. Paid $10,000 cash to purchase land. Borrowed $10,000 cash. Provided services for $50,000 cash. Paid $1,500 cash for utilities expense. Paid $35,000 cash for other operating expenses. Paid a $3,250 cash dividend to the stockholders. Determined that the market value of the land purchased in Event 2 is now $12,500. Required a. The January 1, Year 2, general ledger account balances are shown in the following accounting equation. Record the eight events in the appropriate general ledger accounts. Record the amounts of revenue, expense, and dividends in the Retained Earnings column. Provide the appropriate titles for these accounts in the last column of the table. The first event is shown as an example. b-1. Prepare an income statement for the Year 2 accounting period. b-2. Prepare a statement of changes in equity for the Year 2 accounting period.
Dakota Company experienced the following events during Year 2: Acquired $30,000 cash from the issue of common stock. Paid $10,000 cash to purchase land. Borrowed $10,000 cash. Provided services for $50,000 cash. Paid $1,500 cash for utilities expense. Paid $35,000 cash for other operating expenses. Paid a $3,250 cash dividend to the stockholders. Determined that the market value of the land purchased in Event 2 is now $12,500. Required a. The January 1, Year 2, general ledger account balances are shown in the following accounting equation. Record the eight events in the appropriate general ledger accounts. Record the amounts of revenue, expense, and dividends in the Retained Earnings column. Provide the appropriate titles for these accounts in the last column of the table. The first event is shown as an example. b-1. Prepare an income statement for the Year 2 accounting period. b-2. Prepare a statement of changes in equity for the Year 2 accounting period.
Dakota Company experienced the following events during Year 2: Acquired $30,000 cash from the issue of common stock. Paid $10,000 cash to purchase land. Borrowed $10,000 cash. Provided services for $50,000 cash. Paid $1,500 cash for utilities expense. Paid $35,000 cash for other operating expenses. Paid a $3,250 cash dividend to the stockholders. Determined that the market value of the land purchased in Event 2 is now $12,500. Required a. The January 1, Year 2, general ledger account balances are shown in the following accounting equation. Record the eight events in the appropriate general ledger accounts. Record the amounts of revenue, expense, and dividends in the Retained Earnings column. Provide the appropriate titles for these accounts in the last column of the table. The first event is shown as an example. b-1. Prepare an income statement for the Year 2 accounting period. b-2. Prepare a statement of changes in equity for the Year 2 accounting period.
Dakota Company experienced the following events during Year 2:
Acquired $30,000 cash from the issue of common stock.
Paid $10,000 cash to purchase land.
Borrowed $10,000 cash.
Provided services for $50,000 cash.
Paid $1,500 cash for utilities expense.
Paid $35,000 cash for other operating expenses.
Paid a $3,250 cash dividend to the stockholders.
Determined that the market value of the land purchased in Event 2 is now $12,500.
Required
a. The January 1, Year 2, general ledger account balances are shown in the following accounting equation. Record the eight events in the appropriate general ledger accounts. Record the amounts of revenue, expense, and dividends in the Retained Earnings column. Provide the appropriate titles for these accounts in the last column of the table. The first event is shown as an example.
b-1. Prepare an income statement for the Year 2 accounting period.
b-2. Prepare a statement of changes in equity for the Year 2 accounting period.
b-3. Prepare a year-end balance sheet for the Year 2 accounting period.
b-4. Prepare a statement of cash flows for the Year 2 accounting period.
c-1. Determine the percentage of assets that were provided by retained earnings.
c-2. How much cash is in the Retained Earnings account?
Dakota Company experienced the following events during Year 2:
Acquired $30,000 cash from the issue of common stock.
Paid $10,000 cash to purchase land.
Borrowed $10,000 cash.
Provided services for $50,000 cash.
Paid $1,500 cash for utilities expense.
Paid $35,000 cash for other operating expenses.
Paid a $3,250 cash dividend to the stockholders.
Determined that the market value of the land purchased in Event 2 is now $12,500.
Required
a. The January 1, Year 2, general ledger account balances are shown in the following accounting equation. Record the eight events in the appropriate general ledger accounts. Record the amounts of revenue, expense, and dividends in the Retained Earnings column. Provide the appropriate titles for these accounts in the last column of the table. The first event is shown as an example.
b-1. Prepare an income statement for the Year 2 accounting period.
b-2. Prepare a statement of changes in equity for the Year 2 accounting period.
b-3. Prepare a year-end balance sheet for the Year 2 accounting period.
b-4. Prepare a statement of cash flows for the Year 2 accounting period.
c-1. Determine the percentage of assets that were provided by retained earnings.
c-2. How much cash is in the Retained Earnings account?
Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).
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Transcribed Image Text:Prepare a year-end balance sheet for the Year 2 accounting period.
Assets
Cash
Land
Total assets
Liabilities
Notes payable
Total liabilities
Stockholders' Equity
Common stock
Retained earnings
DAKOTA COMPANY
Balance Sheet
As of December 31, Year 2
Total stockholders' equity
Total liabilities and stockholders' equity
Req B2
SA
0
0
0
0
Req B4
>
Transcribed Image Text:Prepare a statement of cash flows for the Year 2 accounting period. (Cash outflows should be indicated with a minus sign.)
DAKOTA COMPANY
Statement of Cash Flows
For the Year Ended December 31, Year 2
Cash flows from operating activities:
Cash receipts from customers
Cash payment for utilities expense
Cash payments for other operating expense
Net cash flow from operating activities
Cash flows from investing activities:
Cash paid to purchase land
Net cash flow from investing activities
Cash flows from financing activities:
Cash receipts from stock issue
Cash payments for dividends
Net cash flow from financing activities
Net increase in cash
Plus: Beginning cash balance
Ending cash balance
Req B3
$
0
Req C1
0
0
33,500
15,000
$ 48,500
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